United Bankshares, Inc. (NASDAQ:UBSI) is about to trade ex-dividend in the next 4 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. In other words, investors can purchase United Bankshares' shares before the 7th of December in order to be eligible for the dividend, which will be paid on the 2nd of January.

The company's next dividend payment will be US$0.37 per share. Last year, in total, the company distributed US$1.44 to shareholders. Based on the last year's worth of payments, United Bankshares has a trailing yield of 4.3% on the current stock price of $34.53. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. So we need to investigate whether United Bankshares can afford its dividend, and if the dividend could grow.

View our latest analysis for United Bankshares

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. United Bankshares paid out 50% of its earnings to investors last year, a normal payout level for most businesses.

Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. For this reason, we're glad to see United Bankshares's earnings per share have risen 13% per annum over the last five years.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Since the start of our data, 10 years ago, United Bankshares has lifted its dividend by approximately 1.8% a year on average. It's good to see both earnings and the dividend have improved - although the former has been rising much quicker than the latter, possibly due to the company reinvesting more of its profits in growth.

To Sum It Up

Should investors buy United Bankshares for the upcoming dividend? Earnings per share are growing nicely, and United Bankshares is paying out a percentage of its earnings that is around the average for dividend-paying stocks. In summary, United Bankshares appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.